Senate approves Permanent Fund formula bill

JUNEAU (AP) A bill to redirect back into state coffers millions in oil revenues bound for the permanent fund was approved by the Senate on Monday.

And Gov. Frank Murkowski said Monday he supports the bill, increasing the likelihood that it will finally pass the Legislature after being rejected in past years.

The measure rolls back a decision by the Legislature in 1980 to increase the share of oil revenues going into the principal of the permanent fund.

At that time the state was flush with oil money and the Legislature voted to put 50 percent of royalty revenues from post 1980 fields into the principal.

Supporters of the measure say the state now faces lean fiscal times and the bonus payments going into the fund are needed for state government. House Bill 11 would return the percent to the constitutionally-mandated 25 percent.

Rep. Norman Rokeberg, R-Anchorage, has been trying to win legislative approval of the measure for several years. It has never passed the Senate.

Critics of the measure have called it a raid'' on the permanent fund since it redirects money bound for the principal.

Senate Minority Leader Johnny Ellis, D-Anchorage, also urged the Senate to reject the bill. It makes a significant change in the permanent fund and should be approved by voters, Ellis said.

But Rokeberg said the Legislature originally voted to direct the money into the permanent fund and should make the final decision to repeal that action.

The bill could provide an additional $40 million to $55 million into the general fund, according to the state Department of Revenue.

Dividend checks would be reduced by about $1 in 2005 and drop by $20 in 2012 under the measure, the revenue department estimates. Rokeberg said it would have minimal impact on dividends.

This takes money out of Wall Street's pockets, not the pockets of Alaskans,'' Rokeberg said.

Sen. Robin Taylor, R-Wasilla, offered an amendment that would return to oil royalties to the 50 percent level if dividends fall more than $20 due to the bill. The Senate adopted the amendment 17-3.

Under a procedural measure, the bill could come up for a vote again on Tuesday. If it is not changed it would go to the House to consider the Senate changes. Rokeberg says he does not object to the change.